Nio, a Chinese manufacturer of electric vehicles (EVs), will receive around $738.5 million in fresh capital from the Abu Dhabi government-backed company, CYVN Holdings , as it looks to strengthen its balance sheet amid a brutal price war in the Asia’s largest economy.
In order to obtain the 7% interest, CYVN is purchasing around 40 million shares from a division of the Chinese internet giant Tencent Holdings. And the deal, the Abu Dhabi-backed fun will also get a place on Nio’s board, according to a report by South China Morning Post.
In the world’s largest automobile market dominated by BYD, Nio and rivals Xpeng and Li Auto are vying for a higher EV market share, the report said.
The investment “will further strengthen our balance sheet to power our continuous endeavours in accelerating business growth, driving technological innovations and building long-term competitiveness,” said William Li, Co-founder and Chief Executive of Nio in a statement.
He said, “In addition, we are excited about the prospect of partnering with CYVN Holdings to expand our international business.”
Following the closure of the acquisition, which is anticipated to occur in early July, Nio and CYVN Holdings have agreed to work together to investigate prospects in international business.
According to a Rystad Energy analysis from March, global EV sales increased by only 3% in January, one of the “most dramatic collapses” in monthly sales as consumer attitude was impacted by the elimination or reduction of government subsidies.